A man walks past an electronic board showing the stock market indices of various countries outside a brokerage in Tokyo, Japan, October 23, 2015.

PHOTO: Reuters

In a year that has held mostly bad news for investors, a tentative rebound in oil prices and a hint that United States interest rate rises may be put on hold were enough to send Asian markets soaring yesterday.

Tokyo led with a 3 per cent gain, while Sydney and Hong Kong each gained 2.3 per cent and Seoul added 1.3 per cent.

Singapore climbed 43.78 points, or 1.67 per cent, to close at 2,657.57.

Remisier Desmond Leong noted that the local market was "surprisingly strong" overall: "Bank stocks did well, second- and third-tier stocks did well too.

"On Wednesday the market opened higher but by the end of the day, it closed lower. Today, however, we managed to sustain the gains.

"Banks have been sold down quite badly but I think because OCBC announced results that were better than expected, there's now interest in the bank stocks."

The rally in Asia followed a similarly positive finish on Wall Street overnight, where markets were buoyed by gains in oil prices.

Oil continued its recovery above US$31 a barrel yesterday after Iran said it supported a plan by Saudi Arabia and Russia to freeze production, although it refrained from committing to curbing its own output.

It was not exactly game-changing news but it was enough to boost crude oil futures by as much as 3.5 per cent in New York yesterday, following a 5.6 per cent surge on Wednesday.

Further adding cheer to the overtired markets were comments by Mr James Bullard, chief executive of the Federal Reserve Bank of St Louis, who said that it would be "unwise" for the US Fed to continue raising interest rates given the recent market turbulence and declining inflation expectations.

Mr Bullard participates in the Federal Open Market Committee (FOMC), which sets policies for the US central bank.

He added that the volatile environment will give the FOMC some leeway to delay its next rate hike.

DBS Bank chief investment officer Lim Say Boon had forecast in a report on Monday that oil prices and global stocks would enjoy a bounce this week after last week's panic selling, but added that the rebound will likely be limited, as concerns that have haunted the market since the start of the year still remain.

"Corporate earnings are at risk of a global recession with growing evidence of earnings contraction even in the US, central bankers are scraping the bottom of the policy barrel with negative interest rates and there is a lack of confidence in Chinese economic data," he wrote.

This means investors are still generally risk-averse, as many feel they do not have a good sense of what is really happening in China, he added.

yasminey@sph.com.sg

This article was first published on February 19, 2016. Get a copy of The Straits Times or go to straitstimes.com for more stories.